Lopez Holdings

 

Lopezes clarify issues on Meralco
The Lopezes today belied claims that their family received compensation from the Philippine government for relinquishing control of Meralco during martial law.

In a statement, the Lopezes narrated how their late patriarch Eugenio Lopez, Sr., lost the family's interest in First Philippine Holdings Corporation (FPHC), holding company for the Meralco shares, to Meralco Foundation, a private foundation, under duress.

Lopez, Sr. was forced to accept a downpayment of P10,000 out of a purchase price of P150 million, with the balance payable "when able" in order to secure the liberty of son Eugenio Lopez, Jr., then jailed on trumped up charges.

In 1990, the above-mentioned transaction was partially rescinded in arbitration proceedings under R.A. 876 presided by retired Supreme Court Justice J.B.L. Reyes. This resulted in 10,645, 047 FPHC shares being returned to the Lopez family.

In 1978. the Meralco Foundation acquired the Meralco shares owned by FPHC on an installment basis for a total price of P872.75 million. The Meralco Foundation made payments up to 1985 when it defaulted. In accordance with the Share Purchase Agreement, the default caused unpaid shares to revert to FPHC to the extent of the unpaid balance.

Hence, Meralco Foundation returned 13.9 million shares, including stock dividends, equivalent to 32.41% ownership of Meralco to FPHC in 1988. The basis of the reversion was reviewed by then Justice Secretary Sedfrey Ordoñez and former Chief Justice Claudio Teehankee. Ordoñez and Teehankee separately gave opinions that it was fair and just that the unpaid Meralco shares should be returned to FPHC.

A second review was conducted by the heads of government financial institutions and negotiations were reopened with regard to certain terms of the agreements.

In its decision dated September 30, 1991, the Supreme Court affirmed the reversion of the 13.9 million shares to FPHC. As a result of that decision, and because FPHC subsequently sold or bought shares in the market, FPHC now directly and indirectly owns 20% of Meralco compared to the 100% it owned before martial law.

"All in all, it took five long years, from 1986 to 1991, for FPHC to finally regain possession of its Meralco shares. Furthermore, the only shares FPHC took back are the shares Meralco Foundation failed to pay for," said the Lopez family in the statement signed by siblings Oscar, Manuel and Presentacion Lopez, and their nephew Eugenio Lopez III, representing his late father, Eugenio Lopez, Jr.

"The Lopez family has done nothing we should be ashamed for with regard to Meralco. We are also proud to point out that during the time when Meralco controlled generation, transmission and distribution of electricity in its franchise area, the cost of electricity was the second lowest in the region as verified by a United Press International survey," they said.

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Lopez Holdings Corporation 
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